2018 Economic Calendar
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8-Week Bill Auction  
Released On 10/16/2018 11:30:00 AM For 10/16/2018 11:30:00 AM
Auction Results
Total Amount$25 B 
Bid/Cover3.13 
Yield Awarded2.170% 

Highlights
Coverage, at 3.13, was solid for the Treasury's debut auction of the 8-week T-bill, though end investor participation was only moderate, with non-dealers taking down 38 percent of the $25 billion offering. The high discount rate was awarded at 2.170 percent, 1.5 basis points above the 4-week bill and 10 basis points below the 3-month rate awarded yesterday. After a period of transition, the 4-week bill will be a reopening of the 8-week bill.

Definition
Treasury bills are sold at public auctions every week. Competitive bids at these auctions determine the interest rate paid on each issue. A group of securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the 2008 financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. Since these are public auctions, the Treasury must announce the size, date and time of the auction every week.

The Treasury announced at its quarterly refunding announcement on August 1, 2018 that it is adding a new benchmark 8-week bill which it will start auctioning on October 16. To enhance the new bill’s liquidity, it will be coupled with the existing 4-week bill, which will subsequently be issued only as a reopening of the new 8-week bill. In the initial transition period, from October 15 through December 3, 2018, the 8-week bill will be announced on Mondays, auctioned on Tuesdays and settled on Thursdays. From November 8 to December 3, the 4-week bill will be announced on Mondays as a reopening of the new 8-week bill, auctioned on Tuesdays, and settled on Thursdays. Following this transition period, from December 4, 2018 onward, both the 8-week and the 4-week bill will be announced on Tuesdays, auctioned on Thursdays, and settled on the Tuesday of the following week. Each 4-week bill will continue to be reopening of an existing 2-month bill. (Department of the Treasury)  Why Investors Care
 

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